Home Improvement Contractors and the Warranties They Never Mention

Home improvement contractors, defined as suppliers may never make any mention of a warranty, before, during, or after they perform work on a homeowner’s home, but that doesn’t mean there isn’t one. The Indiana Legislature saw fit to codify a statutory warranty for homeowners who hire home improvement contractors or suppliers to perform work on their homes. Specifically, I.C. 32-27-1-1 et seq. set forth consumers rights to enforce a warranty against a contractor, even if no mention of a warranty was ever made in the home improvement contract. The Act limits the warranty coverage to real estate home improvements performed pursuant to a “home improvement contract”, and be for an attached or detached single family dwelling. The coverage is extended to attached garages, but excludes detached garages and exterior improvements such as driveways, fences, patios, retaining walls, and landscaping in general.

The statutory warranty applicable to such home improvement contracts covers:

  1. All workmanship and materials from defects for a period of two (2) years from the “Warranty Date”;
  2. Faulty or defective installation of electrical, plumbing, HVAC and any extensions to existing systems for a period of two (2) years from the “Warranty Date”.
  3. Faulty installation or defective materials which makeup the roof or roofing system is warranted for a period of four (4) years from the “Warranty Date”;
  4. For ten (10) years from the “Warranty Date” the home improvement and the load bearing structures affected by it, must be free from major structural defects.

The “Warranty Date” is defined by the statute as that date when all work and home improvements contemplated by the home improvement contract have been substantially completed to permit the owner to occupy and enjoy the improvement in the manner contemplated by the home improvement contract.

The act does allow for a home improvement supplier to disclaim implied warranties, that might extend the written warranties in terms of time and scope, but in order to do so, the supplier must first provide in written form the statutory warranties described above, secure insurance in an amount necessary to cover and warrant the value of the home improvement, and also completed operations product liability insurance sufficient to cover all reasonable and foreseeable consequential damages arising from a defect covered by the warranties provided by the home improvement contractor/supplier. In addition to these requirements, the home improvement contractor must submit a written notice to the homeowner that is worded in a form that is substantially similar to the wording in the Act, and it must be signed by the homeowner.

Absent a proper statutory disclaimer, the workmanship and materials carry all implied warranties. Implied warranties arise by common law, rather than a statute. They developed over hundreds of years and through the common acceptance and broad enforcement became the law. The Courts enforce them on a case by case basis, and the scope and duration of those warranties are generally applied on a reasonable standard. The extent to which any implied warranty might apply to any particular home improvement dispute, is difficult to predict.

Warranties, by their very nature, deal with defects. Defective workmanship, defective materials, and defective design form the complaints that so often arise after the contractor has completed the work. When defects become evident, it is incumbent upon the homeowner to give notice to the Contractor and an opportunity to cure, prior to filing a lawsuit seeking damages for such breach. Indiana’s warranty statute does define “breach of warranty”, but no such breach can occur for a warranty claim without some notice and opportunity to cure.

Home improvement contractors may strictly require notice and opportunity to cure, by inserting their rights to receive proper notice and an opportunity to cure, as provided for by Indiana Code 32-27-3-12. When the notice and opportunity to cure is made a part of the home improvement contract, the home owner is barred from filing a lawsuit claiming a construction defect and or breach of warranty, until such notice is given by the homeowner and the contractor has either failed or refused to cure or offer to cure.

Because the warranties provided by Indiana law, statutorily and in common law, are not exclusive remedies, claimants may and often do sue on multiple theories. In many home improvement complaints, lawyers include counts for breach of contract, breach of statutory and implied warranties, negligent performance, violations of the Indiana Home Improvement Act and the Indiana Deceptive Consumer Sales Act.
As for damages recoverable by breach of warranty, the measure is determined to be either the amount necessary to rectify the defect, or the difference between the fair market value with the defect netted against the fair market value without the defect.

The Indiana legislature saw fit to protect homeowners by requiring home improvement contractors to comply with certain minimum standards that include using contracts that contain basic minimal information, secure licenses and permits, when the law requires, and to guarantee their work, whether their contracts say anything about a warranty or not.

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